Conroy gives in on 4G spectrum payment timing

Summary:Australian telecommunications companies bidding for lucrative 4G spectrum will have more time to pay for the spectrum, after Communications Minister Stephen Conroy decided to delay the payments until 2014.

Communications Minister Stephen Conroy has given in to mobile company demands for extra time to pay for the digital dividend spectrum in the 700MHz and 2.5GHz bands being auctioned off next month for 4G services.

The mobile companies likely to bid on the spectrum — Telstra, Optus, and Vodafone — were concerned that while the auction is being held in mid April, with upfront payments at the time of the auction, they wouldn't get complete access to that spectrum until the beginning of 2015, once the restack of the bands has been completed following the switch-off of the analog television signal at the end of this year.

Conroy announced late yesterday that successful bidders for the digital dividend spectrum will have until the second half of 2014 to make the payments, with the auction commencement date pushed back until April 23.

Vodafone said in a statement that it is a positive move by the government.

"This is a positive step by the minister to recognise that payment for spectrum licences should be close to the time when the licence holder is able to start using the licences," Vodafone said.

Both Telstra and Optus declined to comment.

As it stands, Optus and Telstra are the two main contenders for the 700MHz spectrum, after Vodafone indicated that it wouldn't participate in the auction of that spectrum. All three companies are signing up for the 2.5GHz auction, however.

Optus has not committed to bidding on the 700MHz spectrum, noting that the reserve price set for the spectrum is effectively double the amounts sold in other parts of the world for similar spectrum.

The telcos are also pushing for the spectrum to be released earlier than the 2015 timeline in areas where the switch-off has occurred and the band has already been restacked. The Australian Communications and Media Authority (ACMA) is investigating the possibility of making it happen.